Pot entrepreneurs in Mass. should get ready for a 'roller coaster' ride, industry experts say

Friday

Oct 6, 2017 at 11:51 AMOct 6, 2017 at 11:59 AM

By Colin A. Young/STATE HOUSE NEWS SERVICE

Only a few hands went up in the Hynes Convention Center conference room Thursday morning when the session presenter asked how many attendees currently work with registered marijuana businesses. But almost every other hand went up when asked which attendees would like to work in the marijuana industry.

The more than 50 entrepreneurs, investors, and lawyers who filed into the conference room Thursday morning were there to try to get a leg up in the competition to secure a Massachusetts marijuana license and get into the marijuana industry at the ground floor.

"I was recently with a client who told me that when he got into the business years ago the guy who brought him into the business asked him if he was ready to get on this roller coaster," Charles Smith, a regulation and compliance consultant to the cannabis industry, told the packed room. "You have to understand that it is a roller coaster. Like any other small business or startup it has its ups and downs, but they seem to be more extreme in this industry."

Marijuana has long been profitable on the black market, but the world of weed is beginning to open up to legitimate businesses, attracting investors and business people interested in starting legal cannabis operations in Massachusetts.

Smith's message to prospectors Thursday at the Cannabis World Congress and Business Exposition was to get their ducks in a row and focus on having compliant real estate, securing capital and having a team with subject matter expertise in place. He also urged potential business owners to build relationships with community officials.

"I think the tide will turn and I think that local officials will become educated," Smith said of the spate of municipal bans on marijuana businesses. "But if you want to operate in a community, you need to get out and meet your local officials ... you're marrying that community for better or worse. They're going to make a lot of decisions that are going to affect your business."

Smith, who works with about a dozen companies going through the medical marijuana licensing process in Massachusetts, said he expects the state's adult use licensing process to be similar to the revamped medical marijuana licensing process. But potential applicants won't know exactly how the process will be structured until the Cannabis Control Commission releases its regulations.

The legal marijuana law passed by voters and altered by the Legislature spells out at least 40 areas that the CCC is directed to address with "regulations, guidelines and protocols." The bulk of the regulations, the ones which must be in place in order for the CCC to issue licenses, must be promulgated no later than March 15.

Smith said he is not so sure that will happen on time and he would not be surprised by another delay in the rollout of retail marijuana sales.

"In Colorado, for example, they took the year in between the passing of Amendment 64 and the implementation to do all that," he said, referring to the writing of industry regulations. "Here we are in October and what's happening in the commonwealth is the Legislature took a fair amount of time to really rewrite the ballot initiative -- which wasn't done in Colorado or really any other state. That puts us in a bit of a challenging position. The Cannabis Control Commission now has about five months to do what was done in a year in another state with a lot of stakeholder input."

No matter what the regulations say, Smith said marijuana entrepreneurs will likely be put in a near-impossible situation of seeing the regulations and learning the process on March 15 and then trying to submit an application on the first day the CCC can accept them, April 1.

"As someone who's applied for cannabis licenses in almost 10 states to date, that's ridiculous," Smith said. "There is no way that all of the groups that want to apply are going to be able to have applications ready when you don't even know what's on the application until the regulations come out."

Among the topics the CCC's regulations must cover are: the method and form of application for a marijuana license, a schedule of fees related to the application and licensing process, qualifications for licensure and minimum standards for employment, requirements for record keeping and tracking marijuana, minimum security and insurance standards, health and safety standards, and agricultural standards.

The CCC began this week holding a series of listening sessions across the state as it gears up to write the rules that will govern the newly legal marijuana industry here. Smith encouraged people who attended his session Thursday to attend the CCC's listening session at 8:30 a.m. Friday at the Bolling Municipal Building in Roxbury and to get a word in with the people who will shape the industry.

"By and large, these regulations are going to be written by those five commissioners," he said. "Those five commissioners are going to be making a whole lot of decisions that will change this presentation come March 15."